“Affordable” Health Care

Everyone would like to have it and politicians have no trouble promising it, but exactly what is “affordable” health care?

Does affordable mean I can afford to pay the premiums for coverage, or does it mean that those premiums should not increase more rapidly than say core inflation?  Does it mean that what I pay in premiums is based on my income, or my health status?

Perhaps affordable health care means that my out of pocket costs are minimal or nonexistent.  Should I pay a deductible before I am reimbursed for my expenses, should that deducible apply to outpatient services (the fastest growing and most profitable segment of the health care economy) or in-patient hospitalization or both?  Should there be a limit on what I and my family pay each year for health care, as they say in the business, an out of pocket limit, typically $3,000 to $10,000 per year.  Is such a limit affordable?

Does affordable mean only what I pay directly in the form of premiums and out of pocket costs or does it include a myriad taxes?  If I am on Medicare I pay only 25% of the cost of Part B (and now Part D if I choose), I pay nothing for Part A hospital services, but the rest of America pays 1.45% of its total income to supplement my coverage, but even that is not enough.  In 1965, the Medicare Part B deductible was $50.00 per year that at the time equaled 45% of the Part B charges; eventually the $100 deducible equaled only 3% of Part B charges.  Today the deductible is $135, but simply applying general inflation since 1965, the deductible should be $337.79 so someone has decided that keeping up with inflation (never mind health care inflation) is not affordable.

Workers who do have employer based health care coverage pay on average 25% to 30% of the cost in premiums plus substantial out of pocket costs, and many pay considerably more.  These contribution levels are rarely reflective of income level, so cost sharing is regressive in most cases, but “affordable”?

Let me make this simple, should Americans pay a set percentage of their income on health care related expenses, what percentage is that and how should that be done? 

Should the cost of coverage be minimal with the emphasis on out of pocket costs skewed toward encouraging more efficient utilization of health care, in other words use more services pay more, take better care of your health, pay less, avoid a specialist when not really necessary, pay less, ask about the need for that second MRI, pay less.  When cost sharing is based primarily on having people pay higher premiums the incentive to care about the efficiency of medical expenses is greatly diminished.  Ask anyone who has health benefit premiums how much is deducted from their pay and likely they will not be able to tell you, but ask them how much the office visit co-pay is and it is a different story.  Moreover, while we are on office visits, does a $15, $20 or greater co-pay per visit make going to the doctor affordable?  There have been many union work stoppages related to a $5.00 increase in co-pay or a 5% increase in premiums. Medicare (or perhaps our legislators) does not seem to agree with this.  While the Part B deductible is artificially low, the monthly premium, which adjusted for inflation from 1965, should be $20.27 is much higher at $96.40 or more, but of course, one must assume that the original $3.00 was realistic when Medicare was enacted.

So, do we know how to define affordable health care?  I cannot say that we do, but that is the point, neither can anyone else, yet is does not stop the term from being used freely when describing any effort to change the US health care system.  Beware the Trojan horse of health care; affordability is lurking within expanded coverage.

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